What Is Life Insurance? Types of Life insurance

What is Life Insurance?  
Life insurance is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of an insured person. Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. 

Types of Life Insurance 

• Whole life Insurance  
• Endowment Life Insurance 
• Term Life Insurance 

Whole Life Insurance: 

Whole life insurance is one type of permanent life insurance that can provide lifelong coverage. It provides a variety of guarantees, which can be appealing to someone who doesn’t want any guesswork after buying life insurance. 

Endowment Life Insurance: 

Endowment life insurance is designed to offer a payout to the policy’s beneficiaries when the insured person passes away, or to the insured person themselves at the end of a set time period. An endowment life insurance policy can act as a savings and investment vehicle, but it’s not right for everyone. 

Term Life Insurance: 

Term life insurance is a type of life insurance policy that provides financial protection to your loved ones in case of your untimely death during the policy term. You simply pay premiums for a set period (the term), and if you pass away during this time, your beneficiary receives the pre-determined sum assured. There is no maturity benefit with term life insurance. 

Posted By: Anjan Karki